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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Huntington Ingalls Industries, Inc. (XNYS:HII) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HII
Name:
HUNTINGTON INGALLS INDUSTRIES, INC. (XNYS:HII)
Sector:
- 126000.00K
Industry:
Aerospace & Defense
CEO:
Mr. C. Michael Petters
Total Employees:
44,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -322.10% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HUNTINGTON INGALLS INDUSTRIES, INC.(HII) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AEROSPACE & DEFENSE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
226.8
One Month Price Target:
$227.61
Six Month Price Target :
$231.65
Likely Price in One Year's Time:
Ticker:
$236.5
Likely Trading Range Today Under (Normal Volatility)
$226.
Price Upper limit ($) :
$227.63
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$216.95
This week:
$204.77
This month :
$182.74
Other Primary facts
Market Cap:
9.16B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
39.95M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.06%
-12.29%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$272.54
$251.72
$181.06
$201.88
Medium risk (<10%) entry points
Buy Call
Sell Call
$244.94
Buy Put:
Sell Put:
$240.50
$208.60
$213.10
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HII
Sharpe Ratio:
-0.13%
Comparison:
HII, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -111.57% lower than the industry
& is -105.51% lower than the market/S&P 500 average
Average Returns/Yield of
HII
Daily returns:
0.01%
Weekly returns:
0.03%
Monthly returns:
0.12%
Yearly returns:
10.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is -85.77% below industry average
Classification:
HII, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.8
Statistical test of Returns:
HII has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.12%
Weekly Volatility:
4.74%
Monthly Volatility:
9.47%
Yearly Volatility:
32.81%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.66%
Volatility in last five trading days has been -68.91% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.34%
Weekly VaR:
-9.71%
Monthly VaR:
-19.43%
How Much Can the price of
HII
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-67.29%
This translates to price declining to:
$187.99
This translates to price declining to:
$74.18
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
HII is a 37.11% riskier investment compared to the market/S&P 500 & is 17.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -32.93% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HII
Beta in relation to market/S&P 500--0.64
Expected beta in 1 year's time:
0.597
Expected beta in 3 year's time:
0.845
Unlevered (debt free) Beta:
0.314
Beta in relation to Nasdaq (XNAS):
0.451
Beta in relation to all global stocks::
0.608
Beta Comparison & Analysis
Beta of competitors/peers::
1.474
Beta is -56.80% lower than peers
Average Industry Beta:
1.007
Beta is -36.77% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
28.12%
Sustainable growth rate is 41.09% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.060
Alpha is -1626.94% below industry average alpha yield
Alpha is -384% below the market average
Analysis of Cost of Capital of
HII
Equity cost of capital:
0.075
Equity cost of capital is -25.24% below industry mean WACC
Unlevered (without debt) cost of capital:
3.70%
Before-tax cost of debt:
2.77%
After-tax cost of debt:
2.19%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.19%
WACC is -27.04% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$245.87
Revenue growth rate per share of (3Y):
3.21
Annual revenue growth rate is -69.76% below industry average
EPS:
$13.33
Expected Annual growth rate of EPS (3Y):
0.60%
Expected future EPS growth rate is -92.07% lower than the Aerospace & Defense industry
Free cash flow (FCF) per share:
$7.89
Balance sheet equity growth per share: 53.15%
Equity growth rate per share is -30690.05% lower than the industry
Debt per share
$84.84
EBITDA per share
$25.88
Valuation Analysis Today of
HII
P/E Ratio:
15.57
P/E Ratio of Competitors/Peers:
27.94
P/E ratio is -44.27% lower than main peers & is -66.86% lower than the industry
Stock price/value with industry average P/E ratio: $626.41
HII is -63.79% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $98.09
Present value of the expected future dividends only: $77.92
P/S (Price to Sales ratio):
0.92
Price to sales ratio is -90.30% below the industry mean
P/B (Price to book value ratio):
3.21
Price to free cash flow: 28.76
Price to free cash flow ratio is -69.55% lower than the industry
Net income growth rate (3Y):
-29.28%
Net income growth rate is -1067.03% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 8.77%
Dividend yeild: 2.06%
Previous Dividend: $1.18
Previous adjusted dividend: $1.18
Previous Dividend: $4.68
Expected next dividend best case: $1.24
Expected next dividend worst case: $1.12
Average dividend payment (long-term): $1.11
Average dividend increase/decrease (growth rate) % per period: 1.42%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 25/08/2022
Expected next dividend declaration date: 08/01/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 27/05/2022
Previous dividend declaration date: 05/03/2022
Dividend History:
2022-05-26--$1.18
2021-11-24--$1.18
2021-05-27--$1.14
2022-02-24--$1.18
2021-08-26--$1.14
2021-02-25--$1.14
Dividend growth rate is -110.74% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
120.09%
Net debt to equity ratio:
108.40%
Debt to assets ratio:
32.10%
Net debt to assets ratio:
28.98%
Debt-to-asset ratio is -40.18% below industry average
Ability to repay debt:
Interest coverage ratio:
11
Interest coverage ratio is 32.27% more than industry average
Looking forward:
Debt growth rate:
89.47%
Annual debt growth is -2% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.87%
Analysis of Key Statistics
Correlation of price movement with the market:
0.551
Statistical significance of correlation:
HII has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 1.86% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.057
Covariance of price movement with the market:
0.07
Kurtosis
4.561
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.294
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
HII
Gross Profit Margin Ratio:
56%
Operating Profit Margin Ratio:
5.13%
Operating profit margin is -101.03% lower than the industry
Net Profit Margin Ratio:
56%
Effective Tax Rate:
14.24%
Effective tax rate is -39.99% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.99%
Return on equity (ROE) is 139.81% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.08%
Return on assets (ROA) is 18.89% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
1.15
Current ratio is -63.65% below industry average
Cash Conversion Cycle (days):
4.1
Cash conversion cycle is -99.28% below industry average
The remaining useful life of property plant & equipment is: 7.1 years
Stock based compensation to net income ratio:
1.68%
In-depth Efficiency Analysis
Revenue generated per employee:
223.2K
Each employee generates -35% less revenue than industry average revenue per employee
EBITDA generated per employee:
23.5K
Each employee generates -37% less EBITDA than industry average revenue per employee
Profit generated per employee:
12.2K
Each employee generates 89% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.9K
Each employee generates 23% more free cash flow than industry average revenue per employee
Assets/Capital per employee
176.6K
Each employee generates 23% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
HII
Regal Rexnord Corporation (XNYS:RRX)
NIELSEN HOLDINGS PLC (XNYS:NLSN)
ACUITY BRANDS, INC. (XNYS:AYI)
OSHKOSH CORPORATION (XNYS:OSK)
CAE Inc. (XNYS:CAE)
DONALDSON COMPANY, INC. (XNYS:DCI)
Pacific Airport Group, S.A.B. de CV (XNYS:PAC)
XPO LOGISTICS, INC. (XNYS:XPO)
ALASKA AIR GROUP, INC. (XNYS:ALK)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�29%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
9.82B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
8.45B
1.38B
-
909.00M
909.00M
-
2.00M
911.00M
-
94.00M
315.00M
1.03B
504.00M
536.00M
625.00M
89.00M
536.00M
Statement of Cash Flow
Date:
Period:
87.00M
Differed Income Tax :
2.00M
Stock Based Compensation :
9.00M
Change in Working Capital :
- 324000.00K
Accounts Receivables:
- 231000.00K
Other Working Capital:
- 34000.00K
Other Non-Cash Items:
3.00M
Net Cash Provided by Operating Activities:
- 83000.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
330.00M
-
330.00M
2.19B
188.00M
77.00M
2.79B
3.33B
2.63B
1.12B
-
-
690.00M
7.77B
-
10.56B
544.00M
-
-
685.00M
1.19B
2.42B
3.39B
1.63B
5.31B
-
7.74B
1.00M
3.98B
- 987000.0K
-
March 31, 2022 at 6:00:00 AM
9.36B
2.82B
10.56B
-
3.39B
3.1B
-
- 43000.00K
- 43000.00K
- 100000.00K
-
- 10000.00K
- 47000.00K
- 14000.00K
- 171000.00K
-
- 297000.00K
330.00M
627.00M
- 83000.00K
- 43000.00K
- 126000.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
HII
2023
2024
2025
2026
2027
$293.69
$306.26
$319.36
$333.02
$347.27